A bill to amend the Internal Revenue Code of 1986 to eliminate installment agreement fees for certain individuals.
- Sponsor
- Sen. Bennet, Michael F. [D-CO]
- Committees
- Finance Committee (primary)
- Last action
- Jul 28, 2026
Bottom line
This bill eliminates IRS installment agreement fees for lower-income taxpayers, potentially easing financial strain for those struggling to pay tax debts.
What it actually does
This bill amends the Internal Revenue Code of 1986 to eliminate fees for taxpayers who enter into installment agreements with the Internal Revenue Service (IRS), provided their adjusted gross income does not exceed 250 percent of the applicable poverty level. The change applies to agreements entered into 12 months after the bill's enactment, aiming to reduce financial barriers for lower-income individuals managing tax debt.
Proponents argue
Supporters argue that eliminating these fees for low-income taxpayers removes an unnecessary barrier to tax compliance, making it easier for individuals facing financial hardship to resolve their tax liabilities without incurring additional costs. They contend it promotes fairness and helps prevent smaller tax issues from escalating due to prohibitive fees, ultimately encouraging more consistent tax payment.
Opponents contend
Critics might argue that while well-intentioned, eliminating fees could lead to a slight reduction in federal revenue or shift administrative costs to other taxpayers. They might also suggest that the existing fee structure, which includes a reduced fee for low-income taxpayers, is already sufficient, and a full waiver could create administrative complexities for the IRS in verifying income levels for all applicants.
The bill is exceptionally short and clear, making it very accessible for a quick read and understanding.
Section 1(a), amending Section 6159(f) of the Internal Revenue Code of 1986.
Elimination of Installment Agreement Fees for Low-Income Taxpayers
This provision amends current tax law to ensure that individuals whose adjusted gross income (AGI) is at or below 250 percent of the federal poverty level will no longer be charged a fee when they enter into an installment agreement with the Internal Revenue Service (IRS) to pay their taxes over time. This change is intended to make it less costly for lower-income individuals to manage their tax debt, effective for agreements entered into 12 months after enactment.
Supporters argue
Supporters argue that this provision directly addresses a financial burden on vulnerable taxpayers, making it easier for them to comply with tax obligations without additional punitive fees. They contend it aligns with principles of fairness and equity, ensuring that those least able to afford it are not penalized further for needing payment flexibility.
Critics contend
Critics might argue that while the intent is good, the existing system already offers reduced fees for low-income taxpayers, and a full waiver could lead to a small but cumulative loss of revenue that could otherwise fund IRS operations. They might also raise concerns about the administrative burden of verifying income for all installment agreement applicants to determine eligibility.
Tradeoffs
The bill balances the goal of easing financial burdens on low-income taxpayers with the potential for minor revenue loss and administrative adjustments for the IRS. It aims to promote tax compliance by removing a barrier, but at the cost of foregone fee revenue.